ourfiniteworld | The world economy may become very different, simply because of
COVID-19. The new virus doesn’t even need to directly affect the rest of
the world very much to create a problem. The United States, Europe, and
the rest of the world are very much dependent on the continued
operation of China. The world economy has effectively put way too many
eggs in one basket, and this basket is not now functioning as expected.
If China is barely producing anything for world markets, the rest of
the world will suddenly discover that long supply chains weren’t such a
good idea. There will be a big scramble to try to fill in the missing
pieces of supply chains, but many goods are likely to be less available.
We may discover quickly how much we depend upon China for everything
from shoes to automobiles to furniture to electronics. World carbon
dioxide emissions are likely to fall dramatically because of China’s
problems, but will the accompanying issues be ones that the world
economy can tolerate?
The thing that is ironic is that it is possible that the West’s fear
of the new coronavirus may be overblown–we really won’t know what the
impact will be with respect to people of European or of African descent
until we have had a better chance to examine how the virus affects
different populations. The next few weeks and months are likely to be
quite instructive. For example, how will the Americans and Australians
who caught COVID-19 on the cruise ships fare? What will the health
outcomes be of non-Asians being brought back from Wuhan to their native
countries on special planes?
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